Free whitepaper The State of Application Development Report 2018/19: Local Government

US tax agency the Internal Revenue Service (IRS) has outlined plans to spend about £217m ($291m) to implement new IT systems and support services.

According to a report in The Wall Street Journal, the IRS wants to update 140 of its computer systems to handle tax reforms.

The tax agency has estimated it will require 542 additional hours of employee effort to modify its existing tax-processing systems to incorporate many changes to tax credits, deductions and brackets, as well as establish new system functionality and workflows, manage programs and integrate services, and facilitate tax reform human capital planning, acquisitions, and financial planning.

The IRS said in its spending plan, “This estimate is based in part on a review of systems with similar capabilities and requirements that the IRS has developed or modified for previous tax law changes; an internal assessment of provisions; and an ongoing third party assessment. Approximately 140 systems will be updated, primarily related to supporting the tax filing season, to accommodate the hundreds of newly revised forms.”

Systems development and preparation will fall into several work streams, including:

Conducting system architecture and engineering analysis that will translate business requirements to their technical IT solutions and identify relationships and inter dependencies between numerous filing season applications. This analysis will also assess the impact and required work to the downstream management and financial systems. Further analysis will be required to estimate the impact to downstream compliance systems and other related support systems such as the Integrated Financial System (IFS). The approximate cost is estimated to be $48m to $53m.

Upgrading or acquiring the necessary IT production environments. These environments support the coding, development, testing, production, and disaster recovery functions required to implement the necessary IT changes (cost $34m to $56m)

Implementing programming changes to the impacted systems, which include existing code reflecting decades of tax law (cost $67m to $86m)

Conducting security testing and assessments throughout the process to protect IRS network and taxpayer data (cost $3m to $8m)